CIH Response to: DWP Consultation on Discretionary Housing Payments guidance manual: August 31 st Shaping Housing and Community Agendas

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1 CIH Response to: DWP Consultation on Discretionary Housing Payments guidance manual: August 31 st 2012 Submitted by to: This consultation response is one of a series published by CIH. Further consultation responses to key housing developments can be downloaded from our website Shaping Housing and Community Agendas Page 1 of 8

2 1. Introduction 1. The Chartered Institute of Housing (CIH) is the professional body for people involved in housing and communities. We are a registered charity and not-for-profit organisation. We have a diverse and growing membership of over 23,000 people, both in the public and private sectors, living and working in over 20 countries on five continents across the world. We exist to maximise the contribution that housing professionals make to the wellbeing of communities. Our vision is to be the first point of contact for, and the credible voice of, anyone involved or interested in housing. 2. The Chartered Institute of Housing (CIH) welcomes the opportunity to respond to the government s consultation on the discretionary housing payments guidance manual that will come into force in April 2013 and on the monitoring arrangements that will be introduced following the increase in government funding for the DHP scheme. 3. CIH has long called for reform of the welfare system and has supported the principal of a universal credit to simplify benefits. However, we have concerns about the implementation of universal credit as the welfare reform programme progresses. Our recent submissions to both the Select Committee Inquiry into the implementation of universal credit, and our submission to the Social Security Advisory Committee expand on those broader concerns. 4. Our response to this consultation is formed by extensive engagement with practitioners and from longstanding discussions with practitioners, members and stakeholders on the implementation of both welfare regimes and discretionary payments more generally. Indeed we were asked to give comments on an earlier draft of the guidance some of our points are raised in the latter part of this response. 5. This response will look at each consultation question in turn but will begin with some general comments about the guidance manual and process. General points on the DHP guidance 6. The publication of new draft guidance and a good practice guide on discretionary housing payments, coupled with extending the circumstances in which the DHP budget can be used, is evidence of the importance this scheme is deemed in relation to helping prevent homelessness or hardship following welfare reforms. Page 2 of 8

3 7. Given the massive changes for individuals and organisations in relation to welfare reform, the increase in the available budget for discretionary housing payments is welcomed. However, our analysis of the increase in the DHP budget (in response to the 2011/12 local housing allowance reforms), suggests the DHP budget accounts for just 1/40 of the 1.6 billion cut in this area. 8. Therefore we doubt whether the DHP budget will be sufficient to cover all potential households for whom the combined impacts of welfare reform may mean a substantial reduction in their household budget. 9. The original use of discretionary housing payments by local authorities was as a temporary solution to tide someone over for a short time period, until their circumstances could be altered. Due to welfare reform, however, the options to move people to alter their circumstances will be diminished. 10. In response, the guidance on the use of DHP appears to suggest their use to aid a longer term issue as the type of shortfall for which DHP can cover has been widened to include reductions in HB or UC following the benefit cap; underoccupation in the social rented sector; or as a result of local housing allowance restrictions. Whilst this is welcomed and supported, we fear the underlying longerterm practical implications of welfare reform risk being overlooked: local authorities and housing providers will need to be on their guard to ensure the underlying causes leading to the need for a DHP are assessed and remedied as quickly as possible by the applicant and the housing provider through the provision of high quality support, information and guidance. 11. In our evidence to the recent SSAC call for evidence on Universal Credit and related regulations (July ) we noted the following concern regarding DHP: access to discretionary housing payments is contingent on receiving an award of housing benefit. Under the UC regulations, once the cap is in place, any monies over and above the cap will be reduced from the housing costs element - some households could in theory find their entire housing award reduced to zero. Therefore, we welcome the fact that a mechanism will be in place to ensure a minimum amount of HB will be payable ( 0.50) thus allowing the local authority to make a DHP award. However, because of the way in which the cap operates in the case of large families and the very high shortfall that will apply, most authorities will be reluctant to award a DHP because of the very high attrition rate it will place on the DHP budget. 12. Should the DHP budget be used by local authorities to provide a fix for what is essentially a longer term problem, the available DHP budget will be reduced rather more quickly, leading to a decrease in the available support for those experiencing short term temporary problems. Page 3 of 8

4 13. We would also note members general concern regarding managing expectations of potential applicants over the next few years. An increased budget coupled with need to publicise DHP (as per the guidance manual) may lead to enhanced expectations for support which the local authority may be unable to match. 14. Precisely because of the discretionary nature of the DHP system, clear criteria will need to be available for potential applicants so they have a broad understanding of the likely types of circumstances or shortfalls a DHP can cover. 15. We would be very concerned should any discretionary criteria lead to a postcode lottery whereby an applicant with the same circumstances may receive a different award simply according to where they live or alternatively, where two applicants with the same circumstances within one local authority could receive different help or support. 16. Whilst each case must be decided objectively, on its merits not on the factor of costs (1.8/1.9) with awards fairly, reasonably and consistently applied, we believe that explicit criteria need to be developed per local authority, so that applicants are aware of the parameters of the scheme and the likely chances of being assessed eligible. This would go someway to alleviating the risk of false hope and expectations. 17. Coupled with this, rigorous monitoring and transparent processes and procedures will need to be developed and adhered to by local authorities including thorough accounting/auditing monitoring mechanisms. 18. The guidance states local authorities should publicise the availability of DHP to potential applicants in a variety of ways. Some of those applicants may wish to read the guidance document themselves. As such, we it may be helpful if some of the sentences were written in more plain language. There are a few examples of the use of double negatives which is confusing to the reader. Therefore, the information contained within the guidance should be as clear as possible to prevent mis-understandings. 19. Looking specifically at vulnerable people, such as those in a relationship in which domestic violence is evident, then if the DHP claims process is inaccessible (such as completely online) and perhaps cannot be done quickly, then this may put women at risk (prolonging their stay in such a relationship) Specific comments in the consultation paper: 20. We note the call for comments on four specific aspects of the DHP guidance but also wish to remark on additional elements of the guidance as below: Page 4 of 8

5 Is the guidance clear on how the DHP budget can be used, and who will be eligible from April 2013? 21. The guidance is relatively clear on how the DHP budget can be used and who will be eligible from April However, that does not mean to say those who can be helped or who need help, will receive that help. 22. However, we do believe the guidance could go further by suggesting that recipients of time limited awards should be given further information on how to reclaim, the timescale for doing so and any further information they will need to provide to the local authority. Are the examples in the good practice guide helpful (with regards to prioritising DHPs? Would you like to see more or less examples? 23. The examples are useful and stand as an aide-memoire for local authorities in assisting them with applicants. However, the range of examples is quite minimal, given the vast number of permutations that could affect a household. What are your views on the monitoring arrangements? 24. We support the need for local authorities to monitor their awarding process and keep accurate records on applicants including the reason for the award and to provide information every six months to government. Developing an accurate picture of the use of the DHP and moreover on the impact of welfare reform (both from a local authority/housing provider perspective and indeed government expenditure perspective) would appear vital. We are disappointed therefore, that the guidance only suggests monitoring the main reason for the award (with reference to benefit cap, LHA issues or size criteria for example), in addition to the annual DHP claim form. 25. It would be helpful for monitoring records to also record the housing circumstances of the applicant (social housing or private rented sector property); their specific needs (whether the property is adapted for a disabled household); and the household circumstances (family, single person with children etc); the length of the award an amount of award. 26. We would not expect the collation of this data to be too onerous on local authorities and would argue it should be proportionate and sensible. However, it would be incredibly useful in helping authorities and government identify those most at risk and enable the development of further practical support to mitigate forthcoming changes. Page 5 of 8

6 Specific comments on clarity of wording within paragraphs in the guidance Deciding whether to award a DHP Para 2.0 This paragraph will cause confusion and should be laid out better. You cannot get HB unless you have a rent liability as such, we assume the final three bullets all relate to UC in which case bullets 3 and 4 should be a subbullet. This is the same for the UC housing costs element (although that can be paid for owners) so may be easier to understand, if it were reworded to say, has a UC award that includes a housing costs element in respect of rent? Or does the 4 th bullet also apply in the case of HB as well? Para 2.2 Non dependent deductions are called housing cost contributions in UC should they be the same? Para 2.3 Para 2.16 Para 2.20 Para 2.21 Para 2.22 This is a good section, but it does not appear to have recognised the distinction between deposit and a bond. Most local authority schemes are bond schemes i.e. no payment is made unless the landlord makes a claim at the end of the tenancy (if the tenant simply moves on and there is no loss then nothing is paid out). Landlords in a bond scheme do not have to register the bond - because it is not the tenants money as would be if it were a deposit. This sentence has too many negatives within it it would be helpful if it could be reworded into plainer language We would query the use of the word shortfall in this sentence. If you meet the DHP then there is no shortfall. We would query the use of the weekly eligible rent on a home, when UC is paid monthly. This sentence could do with more examples in relation to the specified service charges. Claiming a DHP Para 3.12 This sentence needs to say something about capital and customers with capital such as: 1) Provided an applicant receives HB or UC there is no capital limit 2) It would probably be rare to award DHP to someone with more than a nominal amount of capital Page 6 of 8

7 3) You can have a policy to exclude those above a capital limit provided it allows for the possibility to ignore (i.e. do not fetter discretion) Para 3.14 Para 3.16 Para 3.17 Para 3.19 Para 3.20 It would be clearer to add something like the need to bear in mind that for many people applying, it will be to deal with an emergency so a prompt decision is all the more important. Also worth pointing out, that they can appeal to a tribunal about their UC. It might be helpful to include a comment here about notifying landlords only if the claimant had given their consent. Some clarity is needed here it is not clear whether the weekly limit would apply for each week covered, or is it similar to advance awards? This could be a problem, as UC backdating looks like it will be for a maximum of one month only. Administering DHPs Para 4.4 It may be helpful here to also state that there are no rules about how far in advance a claim can be made. Claim maintenance Para 5.2 Para 5.14 It may be helpful to clarify that time limited awards can be made where a change of circumstance is impending e.g. customer affected by social sector size criteria but who is approaching pension age. We would urge clarity here, to emphasise the need to ensure the claimant is given the opportunity to pay first, before any alternative route for collection is sought (other than in the case of fraud). Assurance arrangements Para 7.2 It would be helpful to include the need to show an audit trail, so even if the local authority chooses not to have a form for the request of a DHP, that there must still be a system for recording that claim. Appendix A: Good Practice Guide Page 7 of 8

8 Para 3.1 Is this paragraph relating to transitional protection for existing customers in receipt of HB as of 31 March 2011 needed? By the time this guidance applies, all transitional protection will have expired. CIH contact: For further information about this response and our work on welfare reform, please contact Sam Lister, Policy Officer or Sian Sankey, Policy Manager on the details below: Sian Sankey Chartered Institute of Housing Policy Manager Date August 31 st 2012 Page 8 of 8